Part C: Pro Forma Statements and EFNConsider the following simplified financial statements for Turnbull Inc. assuming no income taxes.The company has predicted a sales increase of 15 percent. Assume that Turnbull Inc. pays out half of itsnet income in the form of a cash dividend. Cost and assets vary.with sales, but debt and equity do not.Balance SheetAssetsLiabilities$ 25,300 DebtEquity$ 25,300 Total$ 5,800$ 19,500$ 25,300AssetsTotalIncome Statement$ 32,00024,400$ 7,600SalesCostsNet IncomeSales Increase15%Payout rate50%1. Prepare the Pro Forma Statements for Turnbull Inc.2. Determine the EFN

1. Pro Forma Income Statement: Sales (15% increase from current level. Hence projected sales is…

Answered: Consider the following simplified…

FINANCIAL ACCOUNTING

10th Edition

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Author:Libby

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Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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Problem 1 (Pro Forma Statements) Consider the following simplified financial statements for the Phillips Corporation assuming no income taxes. Income Statement Sales Statement of Financial Position P23,000 16,700 P 6,300 Assets P15,800 P 5,200 10,600 P15,800 Debt Costs Net income Equity Total Total P15,800 Phillips has predicted a sales increase of 15 percent. It has predicted that every item on the statement of financial position will increase by 15 percent as well. Create the pro forma statements and reconcile them. What is the additional financing needed here.
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Consider the following simplified financial statements for the Wims Corporation (assuming no income taxes) Balance Sheet $10.100 Debt Equity income Statement Sales $25,000 Assets $5,800 Costs 12.900 4,300 Net income $ 12.100 Total $ 10100 Total $ 10100 The company has predicted a sales increase of 12 percent It has predicted that every item on the balance sheet will increase by 12 percent as well. Create the pro forma statements and reconcile them What is the plug variable here? Multiple Choice $13.010 $13.015 O s13.021 $23.940 $13.036
Consider the following simplified financial statements for the Yoo Corporation. Assume there are no income taxes and the company pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not. Prepare the pro forma statements and determine the external financing needed. Income statement $ Sales Costs Net income Sales increase Payout rate 36,000 29,800 $ 6,200 Dividends ALL 15% 50% Pro forma income statement Sales Costs Net income Balance sheet 26,400 Debt Equity Total $ 26,400 Total Assets $ Complete the following analysis. Do not hard code values in your calculations. Pro forma balance sheet Debt Assets Total Equity Total $ External financing needed $ 6,300 20,100 26,400
Consider the following simplified financial statements for the Wims Corporation (assuming no income taxes): Income Statement Sales Costs Net income $46,900 41,140 $ 5,760 Balance Sheet Assets $22,700 Debt $ 6,700 Equity 16,000 Sales Costs Net income Total $22,700 Total $22,700 The company has predicted a sales increase of 18 percent. Assume the company pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, ship but debt and equity do not. Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.) Pro forma income statement $ 55,342 Assets Total $ $ GA Pro forma balance sheet 26,786 Debt Equity 26,786 Total
A1 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 A B V 1 X Sales Costs Net income ✓ C Income statement $ Sales increase Payout rate fx $ Dividends Add. To RE D 36,000 29,800 6,200 15% 50% Pro forma income statement Sales Costs Net income E F G Assets $ Total $ Assets H Total I Balance sheet 26,400 Debt Equity 26,400 Total Complete the following analysis. Do not hard code values in your calculations. Pro forma balance sheet Debt Equity Total $ External financing needed $ J 6,300 20,100 26,400 K
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Use the following information about Red Rocks Inc. to answer the following question: Assume the following: Pays no taxes Return on net operating assets (RNOA) = 18% %3D Has $2,000 in net operating assets financed by equity At the beg. of the year borrows $1000 at 8%. Uses debt to buy additional operating assets. What is the return on equity (ROE) for Red Rocks? Edit View Insert Format Tools Table 12pt v Paragraph v B IU A e T?v I.
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A company has the following information: Earnings before interest and taxes Interest expense $140.00 12.00 40% 10.00 12.00 Tax rate Net change in debt Investment in total capital What is its free cash flow to equity? Do not round intermediate calculations. Round your answer to the nearest cent.
Bhupatbhai

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